Constituency Development Funds: African Parliaments’ Faustian Bargain

Aug 12, 2010

The two core duties of parliamentarians are to represent the interests of the electorate in the making of laws and to oversee the work of the executive arm of government (the executive, in short). However, in a growing number of African countries, parliamentarians are choosing to forsake these duties for the pork barrel benefits of Constituency Development Funds (CDFs). A few civil society organisations (CSOs) oppose this Faustian bargain. But unless donors, international organisations, and far-sighted politicians join their struggle, they may lose this historic battle, and African parliaments could be lost to the struggle for democracy.

In an effort to address these challenges, a growing number of African countries have adopted or are considering adopting CDFs. This list includes Ghana, Kenya, Liberia, Malawi, Namibia, Nigeria, Rwanda, Southern Sudan, Tanzania, Uganda, Zambia, and Zimbabwe. CDFs are funding arrangements that channel money from central government directly to electoral constituencies for local infrastructure projects. Decisions about how these funds are allocated and spent are heavily influenced by members of parliament (MPs).

Not only is the number of CDF countries growing, CDFs also grow very rapidly in size once they are introduced. In Zambia the size of the CDF has grown from 60 million Kwacha when it was introduced in 2006 to 666 million Kwacha per MP in 2010. In Kenya the CDF was introduced at 2.5 percent of the national government’s revenue and, therefore, grows with the overall size of the government budget.

It has been argued that CDFs can empower parliaments by allowing them to allocate and spend money independently of the executive. MPs also claim that CDFs allow them to respond directly to concrete demands from their constituents, something that they may not be powerful enough to make the executive do. In the words of a former Speaker of the Tanzanian National Assembly, “there have developed certain unscheduled expectations of treating their MP as a provider of financial assistance. This can and has created problems for those MPs who are unable to respond adequately to such expectations. For as the old adage goes, ‘members of parliament are men and women of high rank, [but] they have nothing in the bank!’”

Champions of CDFs also claim that they can ensure project delivery in the face of ineffective and corrupt local government structures, bypass central bureaucracies and channel funding directly to community level, and enable the participation of the local population in the choice of what local infrastructure will be delivered.

CDF problems

Many have argued that CDFs breach the principle of the separation of powers by conferring parts of the executive function of budget execution on the legislature. As a Kenyan court ruled in 2005, “any outfit that is composed of members of parliament, and is charged with expenditure of public funds is commingling the roles of the different organs of state in a manner that is unacceptable… it would be against the constitutional principle of the separation of powers for members of parliament to take part in actual spending, then submit their annual estimates to themselves in parliament through the Public Accounts Committee.” Reports of CDF corruption also abound. However, it would be hard to argue that CDFs are more corrupt than other devolved funds or local governments.

But CDFs represent far more than just a storm in a legal teacup or just another story of African corruption. When one considers evidence from countries with long-standing CDFs, the real risks become clearer. The problem with CDFs is that they corrupt the relationship between MPs and their constituents, and between parliament and the executive.

The Commonwealth Parliamentary Association recently warned that CDFs could contribute to shifting the relationship between MPs and their constituents from its proper democratic basis (MPs representing constituents interests in national policy decisions) to a financial basis (MPs bringing home the bacon). A recent study by the Philippine Centre for Investigative Journalism found that because of the CDF, more and more voters think that MPs should be evaluated on their ability to bring in benefits to their constituency, not how effectively they make laws and contribute to the legislative debate. A study by the Africa Leadership Institute already confirmed the same trend in Uganda. A World Bank study on CDFs in India even found that, perversely, MPs make less effort to deliver CDF projects once they are politically secure in their constituency and do not feel compelled to provide patronage.

These examples show that CDFs contribute to clientelism, and to the perceived role of MPs being “automatic teller machines,” rather than representatives of the people in the governance process. Given the multitude of governance weaknesses in developing countries, it would be simplistic to argue that CDFs create clientelism. They do however play a significant role in institutionalizing these harmful practices and even provide a legal basis for them.

The influential Oxford Analytica has also warned that the executive tends to support the introduction of CDFs because such schemes could help to shift the responsibility for capital investment away from them and onto MPs, even though CDFs normally only make up a small portion of total state expenditure. A number of anecdotes have emerged from Kenya of the executive telling people to “go and ask their MP” to build a school or a well-point.

In the 2008 presidential campaign in Zambia, the incumbent president promised to raise the Zambia CDF per constituency to K1.0bn (approx. US$ 225,000), while the opposition candidate promised K4.0bn (approx. US$ 900,000) per constituency if elected. This dynamic of “buying” compliance from the legislature is one factor that explains the rapid growth in the size of CDFs. Ironically the executive seems to be prepared to use CDFs to dominate parliaments even more effectively.

What is to be done?

The alternative to the short-term cash benefit that CDFs provide to MPs and some of their voters is the long-term task of reforming, capacitating, and empowering legislatures to influence budget allocations, and to hold the executive to account for the implementation of the budget. African legislatures need budget offices, training, political alliances, and in some cases even electoral reform. Such a long slog is not attractive in the face of the fast food promises of CDFs. The evidence does, however, suggest that CDFs’ short-term pleasure will lead to long-term pain.

MPs have sold their birthright for a mess of pottage. Timid donors have chosen to look the other way. The executive is exploiting the situation to its maximum benefit. Some international organisations have even accepted CDF as being “here to stay” and are trying to limit the damage that they cause. CSOs like the Policy Forum in Tanzania and Muhuri in Kenya are the only ones prepared to expose CDFs publicly. If we don’t rally around them African parliaments may soon be lost to the democratic project.

3 comments:

As mentioned in the post, CDFs grow very rapidly in size once they’re introduced. Two weeks ago in Uganda, the Parliament’s Public Accounts Committee (PAC) announced their recommendation that the CDF money be increased from Shs. 10 million (US$5,000) to Shs. 70 million (US$35,000) for each MP per year. Among CDF schemes around the world, Uganda’s (established in 2005) is the smallest in terms of the amount of funds involved. The proposed increase means that the CDF would cost the government about US$15 million annually (up from US$1.6 million). The argument is that Shs. 10 million is not enough for MPs to implement any meaningful development projects. In their arguments to increase the CDF, the Ugandan PAC referred to the amount of CDF funds received by their Kenyan counterparts to “help fight poverty”. (The CDF in Kenya is one of the largest, with each MP receiving approximately US$1 million per year). Ironically, the PAC acknowledged weak accountability within the CDF scheme while also recommending the increase. It is not yet clear whether this means that the increase would be accompanied by stronger oversight mechanisms. It will be interesting to see how Ugandan civil society responds to the proposed increase, in light of the civil society response to CDFs in neighboring Kenya and Tanzania.